An increase in U.S. imports from Mexico ________ the supply of dollars and ________ the demand for pesos.
A. decreases; increases
B. increases; decreases
C. increases; increases
D. decreases; decreases
Answer: C
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Which of the following is a name for when a bank promises to lend funds to a borrower to pay off its commercial paper?
A) loan commitment B) standby letter of credit C) securitization D) loan sale
For government, most market activity can be explained by the goal of:
A. Welfare maximization. B. Social responsibility. C. Utility maximization. D. Charitable responsibility.
If you own a building and you decide to use that building to open a restaurant,
A. there are no sunk costs involved in this decision. B. there is no opportunity cost of using this building for a restaurant because you own it. C. the only cost relevant to this decision is the price you paid for the building. D. there is an opportunity cost of using this building for a restaurant because it could have been used in other ways.
To calculate the revenue government receives when a tax is imposed on a good, multiply the
A) pre-tax equilibrium price by the pre-tax quantity. B) after-tax equilibrium price by the after-tax quantity. C) tax by the pre-tax quantity. D) tax by the after-tax quantity. E) after-tax equilibrium price by the after-tax quantity and then subtract the pre-tax equilibrium price multiplied by the pre-tax quantity.